Avik Roy is a conservative blogger on healthcare who is also an adviser to the Romney campaign and who by sheerest coincidence also wants to scare the bejeesus out of everyone about Obamacare, especially if they live in a swing state. In two articles (so far) covering Ohio and Wisconsin, Roy leads off with a dire prediction: that Obamacare is going to cause premiums to go up 55 percent to 85 percent (Ohio) and 35 percent (Wisconsin) for individual insurance policies. Is this true? Are premiums going to go up like this?The individual market, where individuals (rather than businesses) purchase insurance policies is not like the group market and the way that the individual market operates now underlines a great deal of what is wrong with American healthcare today. Individual insurance is what is called in the business "heavily underwritten", which means that each policy sold is heavily scrutinized by underwriters. This means, of course, that no pre-existing conditions need apply, which in turn means that one has to be in almost perfect health to get such a policy. People who buy these policies also do not get the same level of benefits (as a rule) that people get with company policies. (For example, maternity care is usually not covered). So individual policies are relatively uncommon (only about ten million Americans have them -- out of about 200 million people with insurance) and relatively cheap.Under Obamacare, the individual insurance market will have to offer the same benefits that everyone else gets and will have to offer individual policies to everyone, even those with pre-existing conditions. People who have individual policies and want to keep their current rate levels and benefit levels can be grandfathered. People who before could not purchase insurance at any price will now be able to buy individual policies regardless of their pre-existing condition status and with the same benefit levels that people with group policies have. These new policies will cost about 55 percent to 85 percent (in Ohio) more than the cut-rate policies that can only now be purchased by the very healthy.
In the case of Ohio, Roy has appended a chart from an actuarial consulting company called Milliman that outlines the sources of the new rates. By way of comparison for small commercial groups (employers with 100 or fewer employees), the same things that will be increasing individual rates will be increasing small group rates by 1 percent to 3 percent. In the case of groups larger than 100 employees, rates won't go up at all.Roy uses a similar sleight of hand when he talks about Medicare. Obamacare will "cut" $716 billion from Medicare over the course of a decade. Ohio's share of this is $21.2 billion. Roy says:
This year, Ohio has 1,971,260 Medicare enrollees, which means that these cuts amount to $10,763 for every senior in Ohio.
He does not say that he is not talking about benefit cuts and that he is not talking about one year, but it sure looks like seniors are going to be hit for almost $11 grand a piece. In fact, these cuts are costs that will be cut over ten years whether or not Obamacare is repealed. The fact is, medical care becomes more efficient each year and these efficiencies (not benefit reductions) are going to fuel the savings. Fraud elimination will also contribute to these savings; Roy himself points out in another shrill article that Medicare fraud now amounts to four times the total profits of all commercial insurance companies.Roy also (in the Ohio article) has a headline that says Survey: 24 percent of Ohio doctors will stop accepting Medicare patients. Read further and one finds that the 24 percent said they would stop taking Medicare patients if fees decrease ten percent. While Obamacare mandates that fees will be reduced this much over a decade, Medicare mandates the same thing. Again these are not some kind of lump-sum reduction but cost cuts over a decade. If you think that they are utterly unreasonable, think about how many things that were once done with lengthy hospital stays that are now done on a outpatient basis.Avik Roy has made himself a bit of a career trying to scare people about Obamacare with articles like How Obamacare's $716 Billion in Cuts will Drive Doctors Out of Medicare and Obama's MLR 'Bomb' Will Create Private Insurance Monopolies and Drive Premiums Skyward Hallelujah! where he predicts declining insurance profits (didn't happen), soaring individual and small group premiums (also didn't happen), and further monopolization of private insurance markets (been happening for decades). I think he knows better. But his main job isn't to inform; it's to alarm. What he wants to do is to scare enough people to tip the balance towards Romney and the other GOP candidates. Don't be scared, even if it is Halloween.